Toespraak Commissaris Hübner over de financiële mogelijkheden voor lokale auroriteiten in Griekenland (en)

Member of the Commission responsible for Regional Policy

Financial opportunities for local authorities in Greece

Conference organized by Eurobank EFG in cooperation with EIB

Athens, 29 March 2007

Extracts :

"We need to invest more in our education systems, not least in our universities; we need to invest more in research and development and innovation, and reinforce the links between universities and industry; and we need to unleash the entrepreneurial energy of our SMEs by reducing administrative burdens and by improving their access to finance.

Cohesion policy is far from being an instrument of redistribution or support. Rather it is a policy which is designed to dynamise regional and local economies, to allow them to discover or to unleash the comparative advantages which they possess, and to put themselves on the path of sustainable development. An essential part of the design of regional policy is partnership.

Private investors and the banking sector will play a key role in this partnership for two sets of reasons : a) it helps to improve the effectiveness of regional policy programmes, b) it contributes to the development and modernisation of the financial sector in the regions on a sustainable basis."

Dear Ministers, Dear President of the Greek municipalities, dear Director General of Eurobank, Ladies and gentlemen,

Thank you for your invitation to speak today at your conference on "Financial opportunities for local authorities in Greece".

I want to discuss three issues with you. I will start by examining very briefly the main challenges the European Union faces today in the context of globalisation. Then I will look at the role our renewed cohesion policy is playing in contributing to the achievement of the Lisbon objectives. Finally, I will focus on the enhanced role which local and regional authorities are invited to play - in partnership with the private and banking sector - in Greece and across the regions of the European Union, in promoting growth, jobs and competitiveness through cohesion policy.

Let me start with a few words on the main challenges the EU is facing in today's global world economy. In a country such as Greece, which has played a key role in global shipping for centuries, there is no need to convince you that globalisation is not a new phenomenon. And I am sure that you will agree that it continues to bring our citizens many benefits - lower prices for goods, new markets, new products, more economic growth. The European Union is the biggest world trader so we benefit greatly from extended global markets. At the same time, however, the pace of change we are witnessing today is faster than ever before and it is creating a feeling of insecurity in some parts of our societies. In the last twenty years, the economic and technological changes behind globalisation have forced continuous economic and social adjustment in Europe. China, India and other emerging economies are challenging the rest of the world in a whole range of products, both low and high technology, and increasingly in services too. And the impact of these changes is often experienced unevenly across our economies.

We cannot switch globalisation off, and we will not benefit by trying to protect the European internal market against the forces of globalisation. But we do have to find a way of managing it. And we have to do this against a background where, even as the European Union, we are a small part of the globe, both in terms of surface and of population. In the decades to come our relative size in terms of GDP will be shrinking as emerging competitors experience the faster rates of growth of those catching up, and in terms of population as our populations decline. The economic and political advantages that we gain by being part of the world's largest integrated economic area are so well established that they are easily taken for granted. But we must not forget that the EU single market and our single voice in international trade negotiations are essential elements in our strategy of rising to the challenge of globalisation. Together we must ensure that we have the flexibility to adapt to the changing world around us. We must find ways of ensuring that the benefits of being fully integrated into the global system are more evenly spread across our economies. And we must do so by implementing policies that enhance growth and job creation and strengthen our competitiveness, and by providing our citizens with the skills and opportunities to benefit from these changes.

In short, we need to promote our capacity to change, and in order to do this we need precisely the sort of reforms which are at the heart of the Lisbon strategy. We need to invest more in our education systems, not least in our universities; we need to invest more in research and development and innovation, and reinforce the links between universities and industry; and we need to unleash the entrepreneurial energy of our SMEs by reducing administrative burdens and by improving their access to finance.

The need for these reforms is well known. The real challenge is in making it happen. When the Commission reported to the Spring Council earlier this month on progress in implementing the Lisbon Agenda, we gave an upbeat assessment of the progress we are now making. And in a much broader perspective I believe that the 50th anniversary of the European Union which we have been celebrating this month, gives us a new starting point, to go ahead and to deepen our integration, to innovate more, to reform further, and to build on our unique European intellectual potential and heritage - to which Greece has contributed so much.

Let me turn now to European cohesion policy. When talking of cohesion policy we often focus on money and investment - for an audience which includes representatives of the banking sector this is perhaps what is expected! So let me remind you first of the scale and scope of our activities. Over the next nine years we will invest in the regions of the European Union about €350 billion of Community funding and a comparable amount of national public and private contributions. In the case of Greece, you will have a fourth major investment package from the Union totalling €20.4 billion which, even after the pressures on the budget for the next period and taking account of the rising prosperity in Greece, compares well with the figure for 2000-2006.

The scope of our activities is laid out in the Community Strategic Guidelines for Cohesion Policy which were adopted by the Council last October. These Guidelines confirm that cohesion policy will be the principal mechanism at Community level for delivering the renewed Lisbon agenda for growth and jobs. Member States have agreed to focus their Regional and Social Fund investments over the next 7 years on 3 broad priorities: first, making Europe, its regions and cities more attractive places to invest, to work and to live; second, encouraging innovation, entrepreneurship and growth of knowledge economy, by developing innovation and research at all levels; third, creating more and better jobs, improving the adaptability of workers and enterprises, and increasing investment in human capital. All Member States have now submitted their National Strategic Reference Frameworks to the Commission, laying out their strategies for regional policy over the next 7 years. It is clear that about €200 billion of the total EU funding of €350 billion will go on areas such as innovation, RTD and the knowledge economy, and on efforts to promote entrepreneurship and the growth of innovative businesses. These are the issues at the heart of the Lisbon Agenda.

But I want to stress that cohesion policy is far from being an instrument of redistribution or support. Rather it is a policy which is designed to dynamise regional and local economies, to allow them to discover or to unleash the comparative advantages which they possess, and to put themselves on the path of sustainable development. An essential part of the design of regional policy is partnership. Our approach to partnership is two-fold. First, there is the multi-level involvement of all relevant decision-makers - public authorities at EU, national, regional and local level. Second, there is also a horizontal partnership, which includes the economic and social partners and other bodies representing civil society. In short, policy design and implementation is firmly rooted in a regional and local context.

In the renewed Cohesion policy for the period 2007-2013, private investors and the banking sector will play a key role in this partnership. The contribution of the banking sector is essential for two sets of reasons. First, I am convinced that it helps us to improve the effectiveness of our regional policy programmes. It transforms grants from the EU budget into recyclable forms of finance making them more sustainable over the longer term. There is a leverage effect by using such grants to attract and combine with private capital. But we will also leverage in financial sector expertise - technical, financial and managerial - in the design and implementation of regional policy programmes. This is essential as the projects we finance - in areas such as research and development, innovation and promotion of entrepreneurship - become more sophisticated and require better financial engineering instruments. Involving the banking sector also creates stronger incentives for better performance of beneficiaries who must repay some of the assistance received. The second reason for involving the banking sector fully in our policy is that this should contribute to the development and modernisation of the financial sector in the regions on a sustainable basis. This will be financial intermediation firmly rooted in local economies, where the identification of challenges, needs, and solutions is most easily done.

Along with the European Investment Bank Group, the European Bank for Reconstruction and Development, and the Council of Europe Development Bank, we have therefore opened a new chapter in our relationship, with greater cooperation on key policy initiatives for growth and jobs. Together we have developed three new policy initiatives in the context of the renewed cohesion policy. These are JEREMIE and JESSICA on which I will focus today, and JASPERS which, while open to all Member States, will help the new Member States in particular to design and implement high quality large projects. These three initiatives are bringing the European banking sector to the heart of the renewed cohesion policy.

In the case of JEREMIE (Joint European Resources for Micro-to-Medium Enterprises), the Commission and the European Investment Fund, in close cooperation with the EIB, launched a joint initiative for the programming period 2007-2013, to improve access for micro to medium-sized enterprises in regions to technical assistance, grant instruments, and in particular non-grant instruments such as loans, equity, venture capital and guarantees. The objective is to enable Member States and regions to use their Structural Funds allocations in a more efficient, flexible and revolving manner to support small and medium scale enterprises, by transforming Structural Funds into repayable financial engineering instruments. Banks, equity investment funds, loan and guarantee funds, venture capitalists, will be among the key actors to co-invest and to implement JEREMIE. The EIF has been mandated by the European Commission to support the regions and assist managing and programming authorities in defining the possible JEREMIE schemes in their respective regions.

Greece was among the first Member States to make progress with the JEREMIE initiative, by signing last October a Memorandum of Understanding with the EIF to entrust it with the JEREMIE holding fund tasks. And now, the Greek authorities and the EIF have made further progress and are very close to the signature of a JEREMIE funding agreement. I want to congratulate the Greek authorities on that, and to express my confidence on the benefits that JEREMIE will bring to SMEs, new business and sustainable development in Greece.

JESSICA (Joint European Support for Sustainable Investment in City Areas) is a joint initiative of the Commission with the EIB and Council of Europe Development Bank to finance urban renewal and development. The objective is to transform Structural Funds into recyclable resources to be invested for sustainable urban development, in the programming period 2007-2013. Municipalities, banks, investment funds, are encouraged under JESSICA to develop partnerships and to invest in more and better prepared revenue generating urban projects. Six detailed JESSICA 'scoping studies' were carried out at the end of last year, and we will now proceed to carry out detailed evaluations of the potential for investments under JESSICA, in the cities and towns of the European regions.

Here again, Greece was one of the first Member States to express interest in making use of JESSICA. I am confident that rapid progress will be made in carrying out the study and programming for JESSICA, allowing Greek cities and municipalities, banks and other investors to build and develop partnerships for more and better urban projects, for urban renewal and development.

Ladies and Gentlemen,

A broad partnership of national and local authorities will be a key factor for delivering quality programmes, projects and actions for the 2007-2013 period. Associating regional and local authorities in partnerships with the EIB or the EIF, and with the banking sector under the new JESSICA and JEREMIE initiatives, will contribute to enlarging the investment, innovation and capacity building opportunities for local communities and societies. It will also empower our citizens and businesses to take action, and unleash the entrepreneurial potential in our economies which is still frequently frustrated by the lack of access to finance. I want to stress that while this approach is locally based, it is firmly rooted in a national and European perspective. The European dimension of regional policy gives regions and local authorities the opportunity to go beyond local, regional and national boundaries. It enables them to benchmark their efforts against the global challenges and opportunities I mentioned earlier today, and to identify their place in global value chains and clusters. All of you in this room today have a role to play in seizing the opportunities which regional policy offers to Greece, and to exploit the leverage, sustainability, innovation and development potential which it provides. I wish you well with your efforts.

Thank you.